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A $1,000,000 bond issue on which there is an unamortized premium of $83,000 is redeemed for...

A $1,000,000 bond issue on which there is an unamortized premium of $83,000 is redeemed for $804,000.

Journalize the redemption of the bonds. If an amount box does not require an entry, leave it blank.

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Answer #1
Computation of Gain on Redemption
Carrying amount of the bond $ 10,83,000.00 ($ 1000000 + $ 83000)
Less: Redemption value $   8,04,000.00
Gain on redemption $   2,79,000.00
Journal Entry
Particulars Debit Credit
Bonds Payable $ 10,00,000.00
Premium on Bonds Payable $      83,000.00
To Gain on redemption $ 2,79,000.00
To Cash $ 8,04,000.00
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